'What’s the difference between Mr Osborne’s £900 better off and Mr Miliband’s £1,600 worse off'?IFS Post-Budget Briefing 2015
Budget Briefing 2015
Paul Johnson’s opening remarks
March 19 2015
"What’s the difference between Mr Osborne’s £900 better off and Mr Miliband’s £1,600 worse off?
In part the difference arises because Mr Miliband is talking about gross earnings, not net incomes. The latter allows the fuller description of what has happened to household living standards. Earnings have fallen more than other incomes. Employment has risen and pensioners’ incomes have risen. And measures of changes in gross earnings don’t take account of the tax system. If you are a taxpayer and your gross pay falls £1,600 then your net pay will fall by at most £1,100.
In addition Mr Miliband is looking at earnings only up to April 2014. Mr Osborne is relying on forecasts of income through to the end of2015. All of the real increase since 2010 is in the forecast. It occurs in the last year, in 2015. There is no actual increase in the data we have so far.
Finally, don’t forget the range of rather hidden pressures on public spending. Look in table 2.2 of the Red Book, the table that shows the public finance effects of policies announced in previous budgets. You’ll find a figure of £5 billion alongside a line saying “contracting out of NICs”. That is in fact an extra £5 billion of NI contributions required from public sector employers – a £5 billion reduction in spending power. Another £1 billion will be required from them to pay for extra costs of public service pensions.
And once again in this Budget the chancellor has made some unfunded commitments–the help to buy ISA and the extra money for mental health will be paid for by unspecified cuts elsewhere.
The upshot of all this? My guess is that even under a majority Conservative government, annual cuts in public service spending will not turn out much more dramatic than those we have seen over this parliament. We won’t be on the OBR’s rollercoaster. But it is a terrible shame that, despite all the mass of information in the EFO, I am left guessing. Whitehall departments are going to have to plan for some dramatically differing scenarios, one of which they will have to implement in just 12 months time."
(my bold)
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Osborne wants you to believe in something that hasn't happened while Miliband has described reality. Not too difficult to f****** figure out.
'My guess is that even under a majority Conservative government'
Pardon? I beg your god damn pardon? You daft fool what in the world you on about Tory majority government? What is wrong with you? Then the idiot goes on to insult us further by saying the Tories won't really be too terrible after the Tory majority...
edited for formatting clarity